Urban Leaders Fear Cuts In U.S. Aid to Cities

Urban leaders, holding their first national meeting since the election, say they are bracing for a new round of federal aid cutbacks that may rival the reductions in President Reagan's first term.

"We feel threatened," said St. Paul, Minn., Mayor George Latimer, president of the National League of Cities, which begins its annual convention in Indianapolis today.

"We've already been cut to the bone. We've been living with these cuts for so long that we've almost forgotten how deep they really are," the Democratic mayor said.

"I'm sure we will see an assault on the cities," said New York City Council President Carol Bellamy, also a Democrat. "Although cities have taken more than our fair share of cuts, we're going to take some pretty dramatic lumps again. It will be an uphill battle."

It has become an annual ritual at these conventions for leading mayors to urge Washington to increase urban aid, although the calls have been muted in the last two years. In the wake of Reagan's landslide victory, however, city officials said they will be hard pressed just to hold the line.

Some league officials said in telephone interviews that they expect the Reagan administration to propose further reductions in housing, health care, mass transit and other aid programs. They said that even three programs that have been considered sacrosanct -- general revenue sharing ($4.5 billion) community development block grants ($3.5 billion) and urban development action grants ($440 million) -- may not be safe next year.

But a leading Republican mayor, Cleveland's George R. Voinovich, was optimistic about the cities' prospects in Congress. "There may be an attempt by some people to whittle away more at some of these programs, but I don't think they will be successful," he said. "I think we're going to hold our own.

"You try to cut out revenue sharing and there will be one hell of a battle, because it touches everyone in this country," Voinovich said.

The urban leaders agreed that the economic recovery has been uneven and that poverty and homelessness continue to rise in many cities.

"We are building a permanent underclass," said Bellamy, who blamed much of the problem on federal cutbacks. "The poor have gotten poorer, and the near-poor have had the rug pulled out from under them. You are losing a whole piece of your society -- the unskilled, untrained, unemployed."

City officials also said they are worried about tax legislation now being discussed in Washington, such as eliminating the federal income tax deduction for state and local taxes.

The officials emphasized that cutting their remaining aid programs would barely make a dent in the $210 billion federal budget deficit. "It's peanuts in terms of the whole picture," Voinovich said. "There's not that much money there . . . and there's a need for it."

The politically moderate league is on record as favoring tax increases, reduced defense-spending and cutbacks in middle-class entitlement programs to reduce the federal deficit.

In a survey of city officials that drew more than 125 responses, 87 percent said the federal deficit is the country's most important problem, and a majority favored cutting it by reducing spending rather than raising taxes. Most respondents said they expect their local economies to continue to grow modestly next year. Seventy percent said such problems as poverty and homelessness have increased or remained the same in their cities